Renewable energy investments hit $1.3trn, a record high.

Global investments in energy transition technologies in the renewable energy sector have reached an all time high, hitting $1.3 trillion in 2022.

According to the “Global Landscape of Renewable Energy Finance 2023” report, the new record-high moved up 19 percent from 2021 investment levels and 50 percent from before the pandemic in 2019.

The joint report by the International Renewable Energy Agency (IRENA) and Climate Policy Initiative (CPI) was launched on the sidelines of the Spanish International Conference on Renewable Energy in Madrid.

It also finds that, although global investment in renewable energy reached a record high of $0.5 trillion in 2022, this still represents less than 40 percent of the average investment needed each year between 2021 and 2030, according to IRENA’s 1.5°C scenario.

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According to the report, investments are also not on track to achieve the goals set by the 2030 agenda for sustainable development.

“For the energy transition to improve lives and livelihoods, governments and development partners need to ensure a more equitable flow of finance by recognising the different contexts and needs,” said Francesco La Camera, IRENA Director-General.

He stated that the joint report emphasizes the importance of allocating public funds to regions and countries that have a lot of untapped renewable energy potential but are having difficulty attracting investment.

“International cooperation must aim at directing these funds to enabling policy frameworks, the development of energy transition infrastructure, and addressing persistent socio-economic gaps,” said La Camera.

In line with the 1.5°C scenario, achieving an energy transition also requires the redirection of $0.7 trillion per year from fossil fuels to energy-transition-related technologies. But following a brief decline in 2020 due to COVID-19, fossil fuel investments are now on the rise.

“Some large multi-national banks have even increased their investments in fossil fuels at an average rate of about $0.75 trillion a year since the Paris Agreement,” the report read.

Barbara Buchner, CPI’s global managing director, said that the path to net zero can only happen with a just and equitable energy transition.

“While our numbers show that there were record levels of investment in renewables last year, a greater scale-up is critically needed to avoid dangerous climate change, particularly in developing countries.”